The business behind the show

Golden Globes trial ends; decision now rests with judge

February 10, 2012 | 2:52
pm

With the two sides hopelessly deadlocked, a federal judge now must determine who controls the lucrative television rights to the Golden Globes Awards show.

Before a packed courtroom in downtown Los Angeles, lawyers representing the Hollywood Foreign Press Assn., which owns the Golden Globes, and Dick Clark Productions, which has produced the annualextravaganza for nearly 30 years, wrapped up their three-week trial with closing arguments Friday.

U.S. District Court Judge A. Howard Matz had urged the sides to try to settle the case before Friday's finale -- but the parties remained at loggerheads.

At issue is the validity of a 2010 agreement that Dick Clark Productions struck with NBC that would keep the Golden Globes on the network through 2018 -- a deal worth as much as $150 million.

But soon after that pact was announced, the Hollywood Foreign Press Assn. cried foul. The group sued Dick Clark Productions, contending that the production firm lacked the authority to enter into a new TV contract without its consent.

Dick Clark Productions, meanwhile, maintains that a pivotal section of a 1993 contract gave the firm latitude to renew its TV licensing agreement as long as NBC remained the television broadcast partner. Dick Clark Productions was acquired in 2007 by Red Zone Capital Management Co., a private equity firm controlled by Washington Redskins owner Dan Snyder.

Matz must now interpret the 1993 agreement. If he sides with the Hollywood Foreign Press Assn., the organization could shop the deal to other networks and launch a bidding war.

His decision is not expected for several weeks.

"It's going to take some time before I can get back to this," Matz said immediately after declaring the end of the trial. Then he complimented the legal teams, saying: "This case has been handled very professionally and I am grateful for that."

On Friday, the two parties agreed on very little -- including which side carried the burden of proof.

Daniel Petrocelli of the O'Melveny & Myers law firm, which represents the Hollywood Foreign Press Assn., argued that his clients had no intention of letting the agreement run in perpetuity. "Every contract was for a finite term," Petrocelli said.

The case should not ride on one sentence "slipped in" the contract, Petrocelli said. If so, then, "those 12 words inserted into an option grant would have changed the entire course of history between the parties and basically enslaved the HFPA to Dick Clark Productions."

But Martin Katz of the Sheppard, Mullin, Richter & Hampton law firm, which represents Dick Clark Productions, took a more expansive view.

He said the HFPA was thrilled to land the awards show on NBC, a major broadcast network, after years of turmoil and obscurity. CBS dropped the show in the 1960s after a voting scandal and a Federal Communications Commission rebuke. After that, the program ran for decades in syndication or on a cable channel. Dick Clark Productions, Katz argued, gave the group credibility.

That was the reason the press group was happy to keep the show on NBC "forever," Katz suggested.

"It is important to view this case through the lens of 1993 and not of 2010 or 2012 when the Globes became a much more valuable property," Katz told the judge. "Dick Clark Productions didn't want to be a victim of its own success, polishing a damaged stone into a diamond and then getting cut out of the deal."